- PSOJ President, Christopher Zacca, is proposing that the Government give consideration to retaining the eight-member Incentives Working Group.
- This is in order to involve team members in the full implementation of the Government’s incentives reform programme and other tax reform measures.
- The legislation seeks to establish a transparent and coherent regime to govern all tax incentives.
Private Sector Organization of Jamaica (PSOJ) President, Christopher Zacca, is proposing that the Government give consideration to retaining the eight-member Incentives Working Group (IWG), which contributed to the development of the Omnibus Tax Legislation.
This, he said, in order to involve team members in the full implementation of the Government’s incentives reform programme and other tax reform measures earmarked under the economic reform programme, “so that we do not lose the momentum we are on.”
The IWG is chaired by noted economist, Dennis Morrison. Its other members include: former Financial Secretary, Shirley Tyndale; Joseph M. Matalon; Chris Bicknell; Glen Lawrence; Keith Collister; Lloyd Goodleigh; and Ministry of Finance and Planning Technical Consultant, Bryan Denning.
The legislation, which was passed in the House of Representatives last month, seeks to establish a transparent and coherent regime to govern all tax incentives.
Its passage forms is one of the pivotal structural benchmarks of the administration’s four-year Extended Fund Facility (EFF) negotiated with the International Monetary Fund (IMF), aimed at reducing the country’s debt, spurring economic growth, and enhancing the country’s global market competitiveness.
Speaking at a Ministry of Finance and Planning-hosted tax incentive reform forum at the Jamaica Conference Centre, downtown Kingston, on Wednesday, December 4, Mr. Zacca informed that he has written to portfolio Minister, Dr. the Hon. Peter Phillips, requesting that consideration be given to the Group’s retention, adding that “I am hoping for a positive response.”
“(Development of) this Omnibus Tax Legislation has been a collaborative effort within the private sector, to work with the government. This level of partnership shows that major changes in this country can be effected with a fairly minimal level of sectoral discord. Major changes, therefore, can be effectively achieved through the alliance and cooperation between both the private and public sectors. This model of public/private cooperation also lays a solid foundation for the social partnership, which all of us are signatories to, in one way or another,” he argued.
He noted that the private sector, and in particular the PSOJ, has been lobbying “intensely” for significant tax reform “for quite some time”.
“This reform is critical to creating a facilitative business environment that is fair and equitable and one that will allow businesses, both big and small, to be competitive, both locally and internationally. So, of course, we are and were pleased when the Government, in keeping with their commitments under the economic reform programme, tabled and passed the Omnibus Tax Incentives Bills in the House of Representatives,” the PSOJ President stated.
Bills comprising the Omnibus Legislation are the Fiscal Incentives (Miscellaneous Provisions) Act; and the Income Tax Relief (Large Scale Projects and Pioneer Industries) Act 2013.
The Fiscal Incentives Act sets out the reforms to be carried out to the corporate tax structure including the introduction of an Employment Tax Credit (ETC); changes to the capital allowance regime and revision of provisions governing the utilisation of tax losses. The Bill also deals with “grandfathering” and transitional arrangements relating to change from the old to the new incentives regime.
In relation to the Income Tax Relief Act, it sets out provision for the designation of large scale projects and pioneer industries that would qualify for tax credit under the Income Tax Act.
Other elements of the framework for the new Omnibus Incentive Regime namely the (Customs Tariff (Revision) (Amendment) Resolution 2013 and Stamp Duty (Amendments of Schedule) Order 2013, were approved.
While acknowledging that the passage of the Bills is “a good start” by the Government in advancing tax reform, Mr. Zacca contended that ongoing monitoring is necessary to ensure that “we can begin, finally, to see Jamaica moving up and surging up in the global competitiveness rankings.”
The PSOJ President commended Dr. Phillips, the Ministry’s staff, and the IWG on the extensive work undertaken to develop the Omnibus Legislation. He also welcomed Dr. Phillips’ commitment to facilitating ongoing dialogue, and openness to suggestions and recommendations on possible strengthening of the Bills’ provisions and associated regulations, “wherever necessary”.
“We look forward to the completion of the comprehensive tax reform process and, as usual, remain committed to working with the government and other stakeholders in ensuring the creation of an enabling and competitive environment for the private sector…and look forward to many more successes in the future,” Mr. Zacca added.